Even your CEO has a boss

Nobody gets anything done alone. A company’s board of directors (aka “The Board”) is proof.

In this issue of TCOY, I’ll explain what this mysterious “governing body” does, and what happens in those exclusive board meetings.

1. Your boss’s boss

A board is the “governing body” for a corporation. In plain speak, they are a group of executives, investors, and advisors that collaborate with a CEO on strategic decisions for the company.

Boards typically meet every quarter to discuss business performance and strategic topics. They may meet more frequently for earlier stage companies.

Members of a board can include:

• The CEO

• Founder(s)

• Investors

• Industry Experts

• “Observer” members who serve as advisors but don’t vote

Boards also vote on key strategic decisions. These decisions pertain to budgeting, financing, fundraising, equity, hiring, and even the CEO’s salary and bonuses.

What happens in a board meeting?

Board meetings typically last about 3 hours. The CEO sets the agenda.

A typical agenda will include a company overview of the past quarter. The overview will cover:

• Performance and KPI review

• Which goals were met and which were missed

• Lessons learned

• Key Hires

• Product Updates

The rest of the time is dedicated to addressing strategic decisions that may impact the direction a company takes. If you’ve ever wondered why your company changed directions out of nowhere, it probably was because of a decision made during a board meeting.

What does the board decide on? It’s usually up to the CEO. They are setting the agenda after all. Some things they may want to include on the agenda:

• Fundraising deal terms

• Equity Allocation

• Debt financing

• Market positioning

• Product Roadmap

• Exit Strategy

• Hiring

Remember that a business is an operation that serves as an investment vehicle. A board is a council that supports the CEO in their efforts to lead that operation to deliver a meaningful return to its investors.

Board meetings are an opportunity for leaders to reflect on the performance of the business, and make informed decisions on how to move forward.

2. Data not decks

Board meetings can create a lot of stress for startups, especially their data teams. Usually this stress comes in the form of last minute requests for data that will make the company look good.

But this is not how board meetings should go.

Make no mistake, It’s important to update the board on performance and KPIs. But this should already be clarified and automated through data best practices.

Data teams can facilitate valuable board meetings by either:

1. Identifying opportunities or risks that are worth discussing.

2. Working with the CEO to provide data for a discussion topic that is on their agenda.

The most effective board meetings are productive. They shouldn’t waste members’ time with presentations or pitches. They should be collaborative discussions that leverage the expertise of experienced advisors.

Data teams can help their CEOs have more productive board meetings by helping them identify topics to discuss and/or providing data to help the board make informed decisions.

3. Why the board matters to the business

Many CEOs and founders stress out about board meetings. They feel that they need to paint a rosy picture to their investors that everything in their business is going smoothly. But this is probably not the most productive use of these meetings.

In this article, veteran CEO Jeff Bonforte argues that CEOs and founders should make their Board work for them, not the other way around. The board is a resource, not a group of people to report to.

Boards can be incredibly valuable for a business. The best companies leverage their board’s expertise to work together to solve problems, make decisions, and grow their business.

This is also why founders should choose their board members carefully. Choosing board members is just as important as choosing who to hire.

Ideally founders choose people who have expertise in an area or industry that will be a strategic asset for the company. Most importantly, they’ll want to choose people that they trust.